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Mad Money

News/Business. (2013)

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01:00:00

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Jim 12, Us 11, Cramer 9, Lang 5, Samsung 4, New York 4, Qualcomm 3, United States 3, Missouri 3, Las Vegas Sands 3, Caesars 3, Skyworks 3, Apple 3, Wynn 3, Wyndham 3, Wheaton 3, Dick Heckmann 3, China 2, Florida 2, Nokia 2,
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  CNBC    Mad Money    News/Business.  (2013)  

    March 12, 2013
    11:00 - 12:00am EDT  

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>> what did you do? >> i outran you! >> i had you. what did you do? >> i'm a good driver. >> oh, man. >> i spanked my boy, jeff. i spanked him good. >> something's wrong. i had him the whole way. i had him the whole way. the hell happened? >> jeff's down there doing this. >> he beat you off the line though. >> i know. >> [chuckles] >> it's all about the driver. >> something stinks. i mean, it was almost as if he hit some go juice or nitrous. i'm calling--th--there was something--there was something that didn't smell right. [both sniff] >> yeah. i smell it now. [laughter] you know what, that settles it. >> hey. >> i'm still better than you. i beat you. >> roundman's not gonna let me live this down anytime soon. >> so 28,500 for the camaro? >> i'm a man of my word. >> i appreciate that. >> so we bought the '69 camaro
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for 24,500. sold it for 28,500. after shipping, made a cool 3,500. but the real big score came from meg. she sold the trans-am for 25 grand. we bought it for 11,000, we put 4,000 in it. we made a cool $10,000. in total, flat 12 did 13,500. roundman may have won the race, but i won the week. >> i think you could outrun a school bus. >> oh, man. >> so look at it that way.
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>> i'm jim cramer and welcome to my world. >> you need to get in the game! >> firms are going to go out of business and he's nuts! they're nuts! they know nothing! >> i always like to say there's a bull market somewhere. >> "mad money." you can't afford to miss it! hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. just trying to save you money. my job is not just to entertain you but to educate you so call me at 1-800-743-cnbc. let the capitulators here be wrong. they almost by nature have to be wrong. talking about analysts and hedge fund managers who find themselves saying that, hey, it's not too late to get in. you ain't seen nothing yet! even though the dow had the eighth straight up day in a row.
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that's what i heard all day yesterday and today. the dow edged up another three points, s&p dipped .24% and the nasdaq is back .32%. look, you know me. i always want to make the points. and there's still plenty of money to be made in this market! if there's money to be made on stocks or even renting them you know i want you to make that money! but i also know the psychology of the market lurks big right now. i see people all over the place trying to join me in the bull camp! they have been sunshine bulls! summer bulls! i see people coming on our air and saying hey, listen, i was wrong! oh, yeah! i shouldn't have called a top, because it felt good to call top! now they like it because the market is working. and you know what? i don't like that. i'm seeing analysts who have been bearish on stocks that i've liked for some time. ages. and they're coming out now and saying now is the time to buy, buy, buy! i don't like that. i'm seeing investors reach and
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chase, even though the dow has been up for eight straight days and it's a marvelous quarter. i don't like that either. so at the risk of the market never coming down again, i want to say right here, that if you haven't bought yet, why don't you wait. if you don't own any stock or a lot of stock or you're catching the stock bug for the first time in ages, take a pass. right now. take a pass. and it's not because i don't like the fundamentals. i like them very much! i just don't like all these newfound bullish fellow travelers here. let me explain why i'm taking more modulated approach to the tape or the action in the market. for the moment. and i stress, for the moment! because i like the market very much. for example, i like the fact that i still feel very lonely in saying that i actually like the economy here and have liked it ever since the fiscal cliff was resolved. sure we got some hiccups. mastercard saying they have degradation. we recognize that china has got
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its head handed to it of late and the united kingdom is now joining italy, france, greece, spain, and taking another step down. geez, it's ugly out there. >> the house of pain! >> i can scream every time someone asks about when the fed is going to take the punch bowl away. i wish that analogy had never been coined. but i have to now doubt -- i've got to doubt, there's no doubt, there's no doubt that there will be a tough moment for this market when ben bernanke changes his stance, even if the economy is humming. i just don't know what level that top will come from. maybe it comes from dow, i don't know, like 16,000, or what the rest of the employment picture will look like. because we do know the federal government is pulling back from job creation fast and furious. oh, by the way, i don't like that north korea just undid the hard fought armistice with south korea or that the new leader wants to destroy washington while watching basketball with dennis rodman. somehow if it was michael jordan hanging out, i would be less concerned. however, despite all these big picture woes, what do we know,
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we know from costco, home depot, target, walmart and from macy's that things are just dandy with the consumer. and as horrible as jcpenney is doing, courtesy of an implosion led by wall-of-shamer, ceo ron johnson, it can't be providing a boost for every retailer, could it be? the consumer is fine. so i'm bullish, what else. housing is still strong, getting stronger. consensus says we'll build 1 million homes, i think they're way off, 20% more than that. 1.2 million. autos still strong, staying strong. industrial production hanging in. job creation. and that is pretty much the u.s. economy. so i'm not concerned about the economy. so why am i concerned about the market? well, look. i think the market can take a breather. that's all i'm saying. a better entry point, which again, is all i'm saying. let me tell you though, why i think that you could get a better place to buy. just wait for it. first, as of today the dow has now been up for eight straight
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days. what does that mean? it means going forward we are due percentage-wise, statistically, to a defeat here. do you know that in the last dozen years we have never had a winning streak of longer than eight straight-up days? not once! not once, have we only had eight straight days, in the black five times before in the last 12 years. so not -- never had nine straight days. and only five times in the last twelve years. and only ten instances we were up seven days in a row. in those cases, a week after the streak was over, the market was only up half the time. and a month later the market was either flat or down 80% of the time. so right now the odds do not favor using tomorrow as a good entry point. okay. i'm looking at the averages. remember, unlike the johnnie-come-latelies who want to get in so badly, i've been a huge bull, so i'm entitled to say that. second, many analysts are joining the bandwagon in what i regard to be a reckless fashion. this guy from goldman sachs went positive on best buy. thanks a lot. the darn thing is up 71% since the beginning of the year. where was this guy when the stock was bouncing along the
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bottom a couple months ago? that's chasing. third. credit suisse upgraded sherwin williams from a sell to a hold today. darn, they also had a sell on the stock from january of 2011, it was at 80 bucks. now it's more than 100 points later, 52-week high. this joker comes on and says he wants to be -- wants to go to a hold? couldn't he at least wait for a price break? finally, let's talk boeing. this stock rallied again, another $1.22. to me this move is a straight shot from 70 to 84. it feels like a short squeeze. hedge funds have been betting against it because the dreamliner's battery woes and couldn't take the pain when a brokerage house came out and said today boeing is about to win a 200-plane order with news that the u.s. gave boeing the go ahead to test the 787 battery fix. i believe the squeeze continues. but you have to understand, it's just a squeeze by people who are chasing, and they cannot take the -- >> the house of pain! >> these stock upgrades and short squeezes all come under the category of chasing. i always say, never force and do not chase.
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wait for your levels. there is no gun to your head. you aren't a hedge fund manager who has to nail every day right, as i used to. no one is standing over you and saying "how could you not have cleaned up today!" so unless you have some merchandise that's knocked down from its highs, and i have ideas later in the show, or has an upcoming trade and catalyst, i say keep the bat on your shoulder. we wait for our pitch. warren buffett, the oracle, always says there are no called strikes in this game. here's the bottom line. i'm not saying get out now. no, not at all. i'm not saying it's over. it's far from over. i'm simply saying at this moment after the eighth straight day up, no streaks longer than that in the last dozen years, we need patience for better entry point. right now, i'm willing to miss a percent, even two. it's just not easy money anymore. mark in georgia. mark. >> caller: boo-yah, jim. as we saw today, gold seems to be going up as the market takes a breather and contemplates a pullback. i would like your thoughts on using the mining companies like
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silver wheaton which you mentioned earlier this week and barrick gold as hedges against the downturn in the market which has obviously experienced a nice run. >> i don't think we're going to put those -- those two are not similar. silver wheaton is a royalty play. barrick is deeply exposed to gold. i prefer the gld but i think silver wheaton could work here. the reversion to gold is bad for the market. step aside for a couple days. michael in new york. michael. >> caller: jimmy, boo-yah from poughkeepsie, new york! >> i was up there the other day. beautiful up there. big turn. i love the way it looks. >> caller: all right, man, long-time listener. loved your book, "getting back to even." >> thank you very much. >> caller: my stock is cvrr. >> congratulations to you for that being your stock. >> caller: they increased the distribution forecast from 472 to 550. what do you think about that? >> the gold measure refinery. why do i say that? you can buy oil for 60 bucks and then refine it and sell it at
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the brent price which is almost double that. that's called making money hand over fist, and all the refiners are doing it. patience, believe it or not, at this stage, at this stage, is a virtue. no! it's a necessity! it's not time to run in fear of this market. i'm not doing one of those get out now, that feels good kind of thing. i'm saying relax. eight straight-up days. why don't you wait? i bet we get a better entry point. "mad money" will be right back. coming up, vacation time? a more confident consumer is spending cash to head out on holiday. but as the reservations roll in, who is booking the gains? tonight, cramer speaks to the ceo of wyndham worldwide to find out if its accommodations are right for your capital. and later, lucky strike. as the economy picks up and states push through legislation to legalize online gambling, is it time to ante up on casino stocks? don't roll the dice just yet. cramer is checking the odds of success when he goes "off the charts."
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plus, striking oil. shale service company heckman has been a controversial play on oil and gas. but critics were left speechless after better than expected earnings sent its shares skyward. find out if the domestic energy boom could power this stock higher when cramer talks to its executive chairman, just ahead. all coming up on "mad money." don't miss a second of "mad money." follow@jimcramer on twitter. have a question? tweet cramer #madtweets. send jim an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. ♪
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you're going to love this one. a blah day like today, i think it's important to point out just how far we have really come in the last four years. remember, almost exactly this time four years ago everyone was scared out of their wits. the economy looked like it was sliding to a depression. the averages hitting generation lows. so now that the averages are back or near record levels, it's
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time to ask, what has been the single-best performing stock over this whole period? the answer, you may not know it. it's wyndham worldwide. w-y-n. the lodging and hospitality services company, also the number-one player in the time-share business. four years ago at the generational low, people were worried about wyndham's viability, pretty interesting, the world's largest hotel chain. stock bottomed at $2.92. now trades at $62.10. let's figure this out in percentages. 2,027% gain. in other words, if you bought 1,000 shares of wyndham at the bottom for $2,920, you would have an investment worth $62,100, enough for a down payment on a house. for those of you who don't know, the company is three key businesses. you might recognize them as ramada, days inn, hotel operator, owns the real estate, pays wyndham a cut of the revenues. second, the company has a vacation exchange and rental biz where timeshare owners swap units for a fee. and they also help rent out other people's vacation properties for a fee and a cut of the commission. finally, wyndham's biggest
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business, developing and selling timeshares, which is a red hot business right now. latest quarter reported in february was fabulous. the stock rallied 50%, only 13 months ago. i think they could have more room to run. let's talk to steven holmes, chairman, ceo of wyndham worldwide, find out more about where his company is headed. mr. holmes, welcome back to "mad money." >> good to see you. thanks for having me. >> to get that performance, you've got to have two things, unbelievable business and also an attitude toward the shareholders. because you have been the most aggressive buyer of stock of any company that i follow. so which -- what is, do you think, the mix between your social contract with shareholders and your business that gave this kind of performance to the people who own your stock? >> well, i think you have to have both, frankly. we have great performance, we have great businesses, and we have performed very, very well. and we have been consistent with our message to shareholders. we have said that we're not a bank, we're not going to sit on cash, so we tend to increase our
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dividend along with our earnings. and we tend to buy back stock when we've got the cash to do it. so that's been a consistent message over six years since we have listed on the new york stock exchange, we have given back about $3 billion to our shareholders. and we think that's the right thing to do because for us to sit on the cash is not the right thing. if we can make acquisitions, we would love to do it but if they're not there at the right price, we want to give the cash back. >> can i just say, you and i saw each other at a function where we listened to walter isaacson talk about apple, if apple did your philosophy, the stock would be at $1,000. >> i don't know. every company is different. i can only talk our company. >> fair enough. now, talk about an asset-light model. and you just mentioned you don't take a lot of risk. but i think viewers always are confused about the hotel business. they figure they see these empty holes during the bad period and that must be hurting wyndham. actually, the opposite. an empty hotel is something you're looking for. >> well, we're looking if we can turn that empty hotel into one of our brands. put our flag on it. but you're right.
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we don't have the upside from when the real estate market goes really high, and people who own hotels can sell and make money. but we also don't have the risk on the downside when the markets are low. we take a piece of the -- as you said earlier, we take a piece of the revenue as a royalty for the use of our brand and to do our marketing. we don't play in the profitability of the hotel. >> but four years ago, there was a surfeit of hotels. we're running into a shortage, aren't we? >> there is not a big supply generation going on right now. the normal supply growth is about 2% and running well below that right now. but it will start heating up. we'll see more hotels coming in. the hotel industry is cyclical. hotels get built and then they get overbuilt and then that drives down the rate that could be charged. >> last time you were on, 50% ago, you said room key, which is a business you have, great concept, put together by five hotel companies, next big thing. you said it's the kayak of the hotel business. in the interim, hotels.com owned by priceline buys kayak.
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are you directly competitive now with price line? >> well, i think we're directly competitive with anybody who sells hotel rooms. frankly, we want to sell as many of our hotel franchisees' rooms directly as possible. because that's the cheapest way for them to fill a bed, is to do it through our system, through our online systems which we have improved dramatically. the room key gives us another avenue for being able to do that, that again, is the lowest cost way for the hotels to be filled. so i think everybody benefits when we push more through our online presence. >> okay. so i go onto your site and i'm surprised it's -- now it's just you're flashing big deals. how do you pick them? right now you've got a couple deals that just seem too good to be true but this is just extra rooms that you're repping? how does it work? how do you pick what you're pushing? >> well, i don't know what you saw that we're pushing. if you're looking for a vacation place, you let me know. but the fact is, whatever is available out there that we can put into the hands of the consumer, we want to. >> the grand isle in nevada? >> beautiful property.
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beautiful property. and we do it based on yield management. the hotel sets the rate that we charge for it. so if the hotel feels they need to present a deal or lower the price, they do that and they present it. we deliver it to the consumer. >> okay. you've got a mobile business. i know that mobile is huge in hotels. how is it working, what does it mean for you? >> it's fantastic. we upgraded our mobile capacity over the last year-and-a-half, two years, year-and-a-half we launched it. it has had a big impact. there's a lot of people who book hotels right from their iphone and blackberry. and i hope they pull over on the side of the road before they book it, but we've made it really easy, because they can look online, push the call button and call directly to our call center to book the room so they can do it directly online or connect and do it through a human being. >> we spoke about the idea that the departure -- the whole is worth more than the parts. how could two companies in this
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very same business, one feel it was terrific to split up and the other feel it's the right thing to be together? >> i think we probably view the two businesses differently. for us, time shares are -- you said before, our largest business. we also view it as more of a fee-for-service business. this business, the time-share business alone, did about 30% of its ebitda in fee-for-service offerings. for example, revenue resort management or rental. now that's moving more and more to fee for services. we go to our asset-light model, what we call our wham model, which is selling other people's product through our sales and marketing force and we get a commission for that. so it really is a fee-for-service business. that is not viewed necessarily that way by everybody. but i think investors are starting to understand that this is an extremely predictable business, did extraordinarily well during the downturn, performs well for all of our competitors. and underpenetrated business, too, with less than 10% of the people who can buy the product, owning the product, you probably
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don't own any yet. so we need to get you -- >> no, not yet. but i sure wish i could buy stocks and own your stock, because congratulations, number-one performer from the bottom. this is steve holmes, chairman, ceo of wyndham worldwide. w-y-n. i know it's up huge but it's not done yet. stay with wyndham, stay with cramer. thank you, steve. >> coming up, lucky strike? as the economy picks up and states push through legislation to legalize online gambling, is it time to ante up on casino stocks? don't roll the dice just yet. cramer is checking the odds of success when he goes "off the charts." and later, striking oil? shale service company heckmann has been a controversial play on oil and gas. but critics were left speechless after better-than-expected earnings sent its shares skyward. find out if the domestic energy boom could power this stock higher when cramer talks to its executive chairman, just ahead. all coming up on "mad money." acceler-rental.
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at a hertz expressrent kiosk, you can rent a car without a reservation... and without a line. now that's a fast car. it's just another way you'll be traveling at the speed of hertz. in a market where the averages are either roaring back to levels last seen in 2007, or in the case of the dow, blown through the levels to new all-time highs, it's worth asking which stocks have yet to fully recover but still could, especially since i said at the top of the show, i am not interested in chasing any stocks here. so i've got an idea. how about the casino names? wynn and las vegas sands are both well off their all-time highs. okay?
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but our strengthening economy means everything from gaming to dining to entertainment is coming back with a vengeance. look at macao. if you believe in a vegas turn-around then caesars could be the way to go as it is the largest las vegas presence among publicly traded gaming companies. in years past, that would have been a huge liability but with the traffic in vegas recovering dramatically, it's now a serious positive. plus, to top it all off, we have online gaming soon, both nevada and new jersey. so what are all these three casino stocks have in common? fabulous charts, according to bob lang, brilliant technician, founder and senior strategist at exlosiveoptions.net, as well as being my colleague at thestreet.com. and the man who famously nailed the boeing buy before its miraculous liftoff. according to lang, caesars, las vegas sands and wynn are headed not just higher, but much higher from here. let's start with caesars, most exposure to las vegas. take a gander at the daily chart.
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wow. lang sees a lot of bullish stuff. incredibly strong buy in early february. more important from lang's technical perspective, the stock has managed to hold above that breakout. it's not surrendering its gains. it's still marching higher! now in late february, caesar's reported a particularly hideous quarter, because the company which does a good deal of business in atlantic city got hit extremely hard by hurricane sandy and the stock pulled back hard off the news. but caesars immediately snapped right back, another sign of remarkable strength. there's where it went down and boom. take a look at caesars weekly chart, please. already up 200% from november lows. lang feels there is much more room to run. in part sees a cup and handle formation. and that's an extremely bullish pattern, where the stock makes it a cup-shaped bottom and trading sideways to make it look like a handle and after the handle is done, it shoots higher. cup, handle! okay?
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this is one of the most reliably positive patterns out there, and if the cup and handle holds true, then lang thinks caesars, a $14.34 stock, could soar to $20 bucks. you want in on that, don't you? how about las vegas sands? first check out the daily chart, okay? lvs. right now lang thinks that lvs is in a consolidation mode after a very nice run in january. some don't think this chart's that good. stay with me. he says two things that makes him think las vegas sands will roar higher once again. first there is the moving average convergence divergence line. we talked about this. that's called the mac-d, which is a momentum indicator which technicians use to track shifts in a stock's trajectory. with las vegas sands, lang says mac-d is about to flash a buy signal. there's the buy signal. that's where the black line, okay, crosses over the red line, and often predicts a move up in the stock before it happens. second, there's the williams
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percentage r oscillator, i know technical, but it's working for us, very bottom of the chart. this is a tool we have mentioned before that was developed by a commodities trader by the name of larry williams. very similar to the stochastic oscillator we often talk about. another momentum indicator that can measure if a stock is overbought or oversold. these have worked well for us in the time since we have been doing these segments. in las vegas sands, the percentage are upwards, making higher lows and higher highs. doing the right thing. lang thinks this stock could soon follow. so, again, this is where we got this, this, this. you go like that, okay? then look at las vegas sands weekly. weekly chart. okay? goes back to november, 2010. lang sees that lvs has made a nice series of cup and handles. cup and handle, cup and handle, okay? patterns like the one he spotted in caesars. lvs is pulling back at the top. if it can break out past the ceiling of resistance that is
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56, i think it can, and lang says 70 bucks. this is his favorite chart of the bunch and thinks it has the best chance of breaking out. real good company but also highly volatile. last but not least, wynn resource, not necessarily the best run but not necessarily the best chart. in fact, he admits the chart is not a thing of beauty like the others. but lang thinks it has bottomed here with a consistent floor of support around 114. that does feel like a floor, doesn't it? remember that moving average convergence/divergence line i talked about? this indicator is about to flash the buy signal. remember the black crosses the red. take a look at wynn's weekly chart. ever since the july lows, wynn has worked its way up way higher, via a series, again, of cup and handles. okay. use this one. that is terrific. just like las vegas sands. if the stock can break out above $125, roughly 7 bucks where it is right now, then lang thinks the sky can be the limit. this is a well-run company. this is the bottom line. the charts say the big casino stocks have a lot more room to run. i like them because they're not
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at their highs, you're not chasing. lang likes wynn and caesars but his favorite chart in the group is las vegas sands. and what a coincidence. lvs is also my favorite as it has both the best fundamentals and the best chart. these stocks have had big moves in recent months but lang tells us they are far from finished. and given his track record and calling stocks on "mad money," i've got to tell you, the preponderance of evidence says he's worth believing in. best chart and best fundies means i think -- please, let's go back to lvs for a second -- means that this stock is about to go to explode. like to go back to lvs. there we go. okay. this is the one that i think he says is going to go the highest, fastest, and i am in agreement. let's take some phone calls. will in new jersey. will. will? >> caller: hello? >> hey, will. >> caller: hey, jim, how is it going? >> real good.
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>> caller: good. boo-yah from lacrosse. >> good, what's going on? >> caller: question about zynga. maybe a acquisition by yahoo! what do you think? >> i think zynga is going up, because people are looking for a number that is unexploited where people can say it's got good momentum. it is a speculative momentum trade, therefore i can't endorse it. susan in new york. susan. susan. >> caller: hey, jim. >> hey, susan. how are you? >> caller: i'm good. could ncr's recent acquisition and their paypal partnership and really solid fourth quarter results make it a buy? >> i'm surprised that hasn't moved more. it should move more on the good news. i'm concerned about paypal -- i believe that the new samsung is going to have some pretty radical technology that may hurt paypal. i'm not recommending ebay here. the charts say the cards are stacked in favor of the casino stocks.
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with las vegas sands drawing the best hand, as a merger between the fundamentals and the chart, you know what, who am i to disagree? don't move. "lightning round" is coming up next.
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icense please.stration what's this? uhh, it's my geico insurance id card, sir. it's digital, uh, pretty cool right? maybe. you know why i pulled you over today? because i'm a pig driving a convertible? tail light's out.. fix it. digital insurance id cards. just a click away with the geico mobile app.
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♪ it is time! it's time for the "lightning round"! i tell you whether to buy, buy, buy or sell, sell, sell. when i play this sound, the "lightning round" is over. are you ready skedaddy? start with david in texas. david! >> caller: boo-yah, jim. >> boo-yah, david. >> caller: hey, thanks to you, a while back i bought standard pacific corp, spf. i've been trimming the top off and playing with the house's money now. should i hang on to it? >> you stay in it. boy, was i ridiculed on that one. that's okay. it's my lot in life. it goes higher. kirk in missouri. kirk! >> caller: hello! >> yo. >> caller: jim, springfield, missouri. >> you bet, man. what's going on there, springfield? >> caller: just checking on the stock, the locals around here, o'reilly automotive, o-r-l-y. >> that is a good stock and even if you are not from missouri, i
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would tell you to buy it. i do like some of these moves andy reid is making, just for the record. let's go to cj in south carolina. cj. >> caller: jim. a great big hilton head baba boo-yah! >> jealous. englewood cliffs boo-yah back at you. what's on your mind? >> caller: i'm wondering what your thoughts are on the stock i've been following, biogen. >> why are you following? why aren't you in it? you know biogen is one of my favorites. i put it up there with the celgene and the best in show. i'm taking ed in tennessee. ed! >> caller: boo-yah, mr. cramer. does ksu still have legs? >> yes, it does. they got the trunk line up from mexico. peso going from 12 1/2 to 10, bonds on fire. john in florida. john. >> caller: hi, jim. john k., dunedin, florida,
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always a pleasure talking to you. >> same. >> caller: jim, with the trace minerals being such an important factor in the electronics industry, what is your opinion with respect to molycorp? >> no, i've got enough problems with a lot of other minerals. we're not chasing them. no molycorp. let's go to mike in new york. mike! >> caller: hey, jim. i've got a university b-b-b- boo-yah for you. >> love the universities. what's up? >> caller: a few months ago you talked about diamond foods. i liked it, researched it. after the hit today, do they recover? >> how did you research it? no knowledge whatsoever of this one. i think you've got to stay away from this. i always say the same thing. i like the nuts in the supermarket. i don't want the nuts at the diamond food corporation. and that, ladies and gentlemen, is the conclusion of the lightning round! >> the "lightning round" is sponsored by td ameritrade. coming up, striking oil? shale service company heckmann has been a controversial play on oil and gas. but critics were left speechless after better-than-expected
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earnings sent its shares skyward. find out if the domestic energy boom could power this stock higher when cramer talks to its executive chairman, just ahead. ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ but at xerox we've embraced a new role. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%... and processing $421 billion dollars in accounts payables each year.
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i'm always talking about how we're in the midst of a north american energy renaissance. courtesy of all of these massive new oil and gas discoveries like the bakken, eagle ford and utica and new technology that makes it easy to get oil from previously hard to reach places. talking about the process of hydraulic fracturing or fracking which uses vast amounts of pressurized water to blast through layers of rock and unlock the oil within. but oh-oh, somebody's got to clean it up. somebody needs to get rid of all this dirty water. that's where heckmann comes in. h-e-k for you home gamers. brings fresh water to drilling sites and removes the wastewater by putting down their own wells in deep or piping or using their own portable water recycling trucks. including the big oil rich
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shales we talk about all the time. bakken, eagle ford, the marcellus, the utica and the permian. last year we had a slow down in drilling costs by the glut of natural gas and heckmann got hit hard, many of you felt it. 2013 starting off real good. heckmann is taking control of its own destiny. the company made two major acquisitions, buying thermal fluid and power fuels which open up a whole new business, environmental solutions where they collect used motor oil and spent antifreeze and recycle it. so how is the new heckmann doing? the company just reported last night, it's pretty clear heckmann got its groove back. they earned 3 cents a share, much better than expected revenues, 113% increase. more important, managers have very positive commentary about this year, and the recent acquisitions have changed heckmann so much, that the company is now changing its name too! nuverra environmental solutions. break that down. in response to this terrific quarter, 11.3%, biggest stock i saw on every exchange.
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let's check in with dick heckmann, executive chair of the corporation and find out where his company is headed. dick, welcome back to "mad money." >> nice to be here, jim. >> you guys say -- your cfo says this is it. the challenges of 2012 are subsiding. are we putting behind us a very difficult period that caused the stock to go down substantially from when you first came on the show? >> well, it sure looks like it to us, jim. the budgets of all of our producers have come online as we expected. there's a lot of excitement in the industry about new technologies and ways to unlock these reserves faster than and quicker and cheaper than we did before. so if you talk to people out there in the business, producing oil and gas, there's a lot of optimism now. >> now, we used to look at the baker hughes rig count as a judge of drilling. right now at a 14-year low.
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but in your q & a, you make it clear that's no longer the way because of technology and you shouldn't think there is a slowdown of drilling just because the rig activation is so low. >> just to look at the bakken as an example, you have seen production in the bakken go up 30% while the rig count was flat. and it's not true. the good news is there are more entrepreneurs in america than there are bureaucrats. and so as these businesses develop, the technologies get better and better and better. and the time to drill reduces. and the ability to drill deeper and longer gets better, you know, per dollar. so the rig technology that we have seen in the last three years has moved light years in terms of where it was three years ago. so now you've got producers able to drill 30% or 40% more wells with the same rig. so rig count really doesn't matter now, as much as production does. >> dick, you mentioned that technologies improve.
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i see throughout this theme that recycling of different oil and water products is the key to the new heckmann, nuverra. how much can you recycle and will one day we not use fresh water for fracking? >> one day, you will use very little fresh water for fracking. you're exactly right. and, again, that technology -- remember that four years ago, this business really didn't exist in any great form. so as the producers -- and, by the way, they're more concerned about the environment than most people in the united states are. so as they saw what was developing, as they saw what water came up from these drilling rigs, as they had a chance to analyze it and test new ways to reuse it, they've gotten better and better and better at it. and we're actually working with several big companies now with the ability to treat the water as it comes up and then reuse it for additional fracs. now, that's going to require it to be taken to sites, it's going
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to be treated, it's going to be brought back to the new sites. but you can see over the last three years not only a dramatic change in the chemistry to the advantage of the environment, but also every single producer we talked to is looking for ways to reuse, recycle, reduce their footprint, reduce the impact they have on the environment that they're working in. >> now, dick, in this oil recycling business, you're going up against clean harbors, they bought safety clean, we had that guy on and those guys are the behemoth. are you able to compete with somebody as big as clean harbors which owns safety clean? >> safety clean does a lot of its own refining. and they bring the oil and the products to be re-refined to their own refineries where they do the work and sell into their end markets. we don't do any of that. we are a collection company. we collect about 35% of that product in the west, and then take it -- some to the safety
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clean capabilities and some to others. but we don't really compete with safety clean as much as we perform the service of picking it up, processing it, getting it into rail cars and off to the refineries. >> you talked about being with some big companies. since the amalgamation you put together, is this now the chevrons that you're dealing with? you're dealing with the major drillers and you come along as a package when they do their own drilling. >> jim, three years ago, we did $15 million in sales and we had 30 people. today we're doing $800 million in sales with 3,000 people. and three years ago, when we couldn't get in the door of some of these big companies, now every one of the top ten producers of energy in the united states is a customer of ours on a regular basis. >> and now -- i'm sorry. you have 8,000 -- you have a huge truck fleet. you switching to all-natural gas?
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>> 70% of our business is in the oil business, is with the oil producers. and 30% is in the natural gas business. so clearly, as natural gas prices recover and we think they will, and as demand for natural gas continues to increase, as we think it will, we're really well-positioned to take advantage of that. but in the interim time here, 70% of our business is in shale oil. >> all right. then let's -- one last question i've got to know. new epa, department of energy. are you guys the solution? what are you hearing as a pushback? you came on this show once. i was very bearish at the time, and i said i fear this government. you told me it's too big. this revolution is too big. how are you feeling about it now, particularly your role in making it so that this industry is not coerced or shut down by the federal government? >> well, i think the state of the union, president talked about natural gas. and the president talked about shale drilling and new energy availability in the united states. the president continues to talk about energy independence. i can tell you for sure, we're
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not going to be energy-independent if we don't drill for energy. and you also look at the way the states have come out to protect their own lands. they have come up with their own rules. you have fracking going on in roughly 26 states. that's 52 senators, 26 governors. hundreds of congressmen who have to worry about all the jobs and the revenues that are created by what's going on in the energy business. if california wants to create -- wants to fix its problems, all it needs to do is allow energy to continue to expand in california. so i think at this point, the government understands that the future of this country depends on domestic energy. and to the extent that they can help it be safer, i think they will. but right now i think everybody from the companies and the producers to the government understands, this is the future of the united states. we are on the verge of
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energy-independence, which is something every president has talked about since jimmy carter. nobody has been able to deliver. >> verge means three years, five years? >> by the end of this decade. >> by the end of this decade, we'll be energy-independent. >> by the end of this decade, it is fairly clear, we will not be importing oil from the middle east. >> that's incredible. are you going to be a buyer of nuverra? are you going to be a buyer yourself? i've known you for many years. when you think it's right, you've been opportunistic of buying your own stock. >> i'm the second-largest shareholder. mark john is the largest, our ceo. and we are all very bullish about what's going on here. >> dick heckmann, congratulations on truly a terrific quarter, and thank you so much for everything you're doing. great to see you, sir. >> nice to see you again too, jim. >> dick heckmann, executive chairman of heckmann corporation, soon to be nuverra. i urge you to stick with this the whole way. it has been tough. it's no longer tough. now it's just right. "mad money" is back after the break.
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i've been trying to find down and out tech names to recommend to you. and i've got to tell you, trying to come up with good ideas in tech is about as difficult a task as i have found. and you know what the reason is? apple. right now it's really tough to own a stock connected to apple. down another nine points today. in any way, shape or form. because apple pulled the stock of your company down as surely
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as it was pulled up when it was winning hearts and minds of the gadget purchasers. how bad is it? let's take real-life examples. easiest to buy, qualcomm. reported terrific numbers. solid dividend boost, multiyear momentum and incredible franchise that includes 4g chips for every handset maker, including samsung. right now the one taking china by storm and leaving apple and nokia behind. yes. that's samsung. the former chinese champ of nokia has been crushed. the problem is that qualcomm has apple as a client and no one in this market wants to touch a company that relies on apple so much because all we keep hearing about is cancellations, pushback of apple orders, furlough of workers making iphones or excess inventory throughout the system. that means every negative piece on apple is a negative rap on qualcomm. same with an apple number cut and price target cut like we got from jeffries. i think apple -- the apple link is a sub rosa reason why qualcomm got taken down a notch by goldman. the stock doesn't move. take skyworks. this is a company that fought to
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get in and stay in apple product lines for years. when we saw skyworks product inside we rushed to buy the stock. now recently we learn that skyworks is in apple devices for the foreseeable future. but the news has hit when we've begun to question the strength of apple's iphone sales so it worked out to be nothing more than a push for skyworks at best. take cirrus logic. simply the best at what it does, why i was i able to get that business. now it's viewed as a one for one trade with apple and can't defend itself because big bully apple won't let cirrus talk about its business with the iphone maker, so it's totally at sea. you know how crazed things have become in the hate apple world? watch intel, slowly creeping up, despite no real momentum and a costly build-out to keep pace with competitors. i think it's rallying because it's perceived as not being caught up in the apple vortex. the iphone, the ipad, the ipad
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mini debacle that's created pain for shareholders in a big way. those who desperately want apple phone business think it's only a matter of time before apple stops buying chips from samsung, its competitor which has a huge device coming later this week. they think it's going to switch to intel. hasn't happened yet. and last, maybe being an apple supplier one day is better than being an apple supplier now. apple, kiss of death to anyone connected to its shareholders, including my charitable trust which owns it. of course, this could all change. on a dime! if apple were to buy netflix, i like netflix, to own itv or twitter, to own isocial or a creative buyback along with a big dividend. that would be the floor. but the momentum and the estimates are going the wrong way right now, taking the entire apple fleet of suppliers into oblivion, the black hole. yes, there has to be a level where apple can bounce. yes, i heard they reached it today but i heard we reached it yesterday and all week last week. but the valuation case everyone is raving about, it's tough to make, given that the numbers keep coming down for apple. and as long as the numbers keep
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coming down, the stock will too, until we see the quarter, the acquisition, and it beats the newly lowered estimates or we get the buyback and the huge dividend. until then, the apple and suppliers quarantine continues unabated. stay with cramer. this is $100,000. we asked total strangers to watch it for us. thank you so much. i appreciate it. i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money? if your bank takes more money than a stranger, you need an ally. ally bank. your money needs an ally.